Opt-in lists, are they really better?

This is a question that we always discuss with our clients before embarking on an email marketing program. The short answer is yes, but opt-in can mean different things to different people, so let’s start by quickly reviewing how the various permission methods work.

Opt-out: These types of lists may contain old, harvested, scraped or purchased email records. Some we’ve seen were built using bait and switch methods like pre-checking a box on a form to download something like a whitepaper. While technically legal by providing a means to opt-out, this loose compliance to CAN SPAM laws is very risky to the technology infrastructure required for email marketing.

Single Opt-in: This method requires someone to actually fill out and submit a form to join your email list. While better than opt-out, it’s still open to risk for things like SPAM complaints because anyone can sign anyone else up with out their explicit permission.

Confirmed Opt-in: This method adds a layer to single opt-in by sending a triggered thank you / confirmation email as soon as someone joins your list. This follow up email contains a link to unsubscribe from the list.

Double Opt-in: The best practice method for list growth in our opinion. With double opt-in, when someone joins your list a triggered confirmation email is sent that they must click before they are added to your list. When a member confirms this list subscription, their IP address is stored along with the time and date they joined.

Now that we have a better understanding of the various permission methods for email marketing, the question still stands – Does getting permission really make a list perform better? There are very solid arguments on both sides; opponents argue it makes things more difficult to join a list while proponents argue list quality vs. quantity. It’s times like this when I’m reminded of a sign that hangs in an old client’s conference room; “In God We Trust, All Others Bring Data”.

Until recently, data on this subject was hard to dig up unless you had it yourself. I can certainly confirm that double opt-in lists we manage for clients always perform much better, but let’s look at some other cases that people have crunched the numbers on.

This first example comes from MailChimp, an email service provider. They took a random sample of 30,000 users who have sent at least 10 email campaigns with lists that ranged from 500 to 1.5 million. Once the stats were aggregated together they found double opt-in garnered a 72.2% increase in unique opens, and a 114% increase in clicks as compared to single opt-in lists. They also found that double opt-in reduced the hard bounce rate by 48.3%, and have a 7% lower unsubscribe rate.

The second example comes from ClickZ, a resource for interactive marketing information. They analyzed a large house-hold name organization that practices different permission methods in different business units. They analyzed 8 business units that are strictly opt-in and 7 that are strictly opt-out. You can view more in-depth stats here, but again the findings show that the opt-in business units, on average, garnered 82 % higher open rates than those of the opt-out business units. Click through rates were also greater; on average the opt-in business units saw more than double the click-through rate (3.1%) garnered by the opt-out business units (1.7%).

This last example comes from the Leukemia and Lymphoma Society who had rampant deliverability issues due to too many SPAM complaints. They found that 30% of their list wasn’t getting email because of IP Blocking. On the good advice of their email service provider, they executed a campaign to re-confirm permission. They saw their list slashed from 33,636 members to only 4,510. Sounds drastic right? By trimming over 29K unengaged list members, they saw SPAM complaints drop from 27 (or 0.51%) per campaign to zero. Their list’s average open rate also rose from 25.2% to 53.1% and the average click-through rate rose from 6.6% to 21.5%

In today’s changing email landscape, many Email Service Providers require double opt-in to protect their infrastructure and the best interests of the rest of their customers who share IP addresses. The fact is that successful email marketing today is largely based on maintaining a good sender reputation and clean IP address by keeping your list members engaged, minimizing SPAM complaints and keeping your list free of hard bounces.

So, are you still questioning the need for a permission based email strategy? Let me know about it in the comments section below, on our Google+ page, or on Facebook or Twitter.